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I agree with the comments before me, value boils down to a simple concept. When the dust settles, is the property worth (on the market) what the seller wants and the buyer wants to pay as compared to other like properties on the market at that time. If the seller and buyer agree on value then yes it's a good deal...
An exception to that is if/when the buyer intends to finance the property, in lieu of paying cash. In that case, the property must appraise for at least the agreed purchase price ... or no deal!
No it's not.
If you are going to bring logic into this then you need to know about sets and subsets.
Houses that you check out - a set of houses.
Houses that appear not to be of sufficient quality - subset 1
Houses that appear to be of sufficient quality - subset 2
Note that subset 1 and subset 2 do not have any further subsets that belong in both. They are mutually exclusive.
Houses that are in subset 2, but not desireable for other reasons - subset 3
Houses that are in subset 2, but are desireable and worth being inspected - subset 4
If you are shopping for a house and you get 9 houses inspected and decide not to buy based
on the results of the inspection, but on the 10th inspection, you buy the house, the $4,000
is a small percentage of what you paid for the house and certainly not a flushing of anything.
If you are buying a used car and spending $20k or more, if you are not qualified to judge whether
the vehicle is of good quality or not, each inspection that rejects a vehicle is worth the money.
It's the same principle. The $300-400 you spent on the inspection that kept you from buying
a "bad" house is always worth it. It's like realtor commissions. If you don't know what you
are doing when selling a house, the commission is always worth it.
I can't imagine why anyone would consider inspecting a house that appears not to be of
sufficient quality. I can't imagine why this thought even got into a discussion of inspections.
Nobody gets inspections done on 9 houses. That's just insane.
I'm sorry but if you are inspecting 9 houses spending $500 for each one then you need to evaluate what you are doing.
What tangible value are you getting from inspecting a house that you are not purchasing? Nothing. You are getting no house, it does not give you any relevent information for your future house search etc.
If you inspect a house and don't buy it you would have been off not bothering to inspect it and not buying it. That is a fact.
That is why people should always look at flipped houses with extra suspicion, because it is very likely it will not be of sufficient quality.
I'm assuming the buyer wouldn't get an inspection unless they had it under contract. Are you suggesting they inspect prior to negotiating a contract?
I'm assuming the buyer wouldn't get an inspection unless they had it under contract. Are you suggesting they inspect prior to negotiating a contract?
No I am suggesting that if you are inspecting multiple houses and don't buy any of them, that you have wasted alot of your own money, that you wouldn't have if you had exercised some good judgement earlier in the process.
I'm sorry but if you are inspecting 9 houses spending $500 for each one then you need to evaluate what you are doing.
No you don't. It is unlikely to ever happen, but it is possible.
To presuppose that somehow you have prenatural knowledge of a house and know whether it will pass or fail an inspection is delusional.
Quote:
Originally Posted by jdm2008
What tangible value are you getting from inspecting
a house that you are not purchasing? Nothing.
Avoiding a money pit is not "Nothing." The tangible value is not losing money.
Anyone who knows anything about investing knows that the #1 rule is to not lose money.
Quote:
Originally Posted by Zyngawf
Nobody gets inspections done on 9 houses. That's just insane.
If you look at nine houses and one-by-one they get rejected due to the inspection that would be unlilely.
To say that "Nobody gets ..." is wrong. It is unlikely, but it is not impossible.
What is insane is just blindly quoting my entire friggin' post and not responding to any particular point. Both of you.
Having to inspect nine houses in a house shopping expidition is extremely unlikely. It is NOT impossible.
Only dumbsh|ts don't get an inspection - on each and every house they are prepared to make an offer on.
While I agree with having a home inspection on a property you are considering purchasing, I'm must tell you that no home inspector will find every fault or problem in a property. I use a guy who I feel does an exceptional job, there is no way he will find everything each time he inspects. To address your comments about flipped houses being of substandard quality, one has to be careful with generalizations. There are many investors in our market who go into homes to "flip" and the homes they rehab and sell are equal to or better than (usually) than the new construction in the same market.
Who cares what the seller paid for it? It's all about the market value of the house. Maybe he paid $43k in a neighborhood selling for $250k. If the house is currently in the condition that matches the other houses at $250k, the value is $250k, and offer what you're willing to pay for the value.
Yah!
Wow!!!
Telling.... who is profiting from who.
But since I am all for the market going back up (not hurting me)... I know what I like.
I agree with FalconheadWest, drive up market price to use as value for me & agents (profiting the future sellers & agents with the bigger pocket change) for max home investment as asset.
I (regular buyer & is there a law forbidding me from doing just that, not that I know of???) & the flippers buy low... then sell high.
Make sense??? (if you don't even look for the deals, how can you find the deals?)
I think smart buyers will buy flipper's price say he got it at $43k & NOT pay $250k... so who is underwater now (= why there exists stories of why even after 2009, new home buyers are *STILL* underwater... says much? tell much???)???
P.S. "If" you want to buy from a flipper... you had better learn to think like one.
Better yet...
Be one & buy at flipper price???
therefore... in summary *is* buying a flipper house still making sense??? Dunno... up to you.
But... also note that inspectors also do not go out of their way to lift extra heavy stuff or expose themselves in danger with certain "barriers". They just write off the place as "inaccessible"... giving the good flippers many places to hide some more unprofitable fixes from the buyers...
Eg.. Pretty up the kitchen to gain that $30k after sinking 10K in (new appliances $4k, new granite $4k, painted cabinets & new tiles $2K)..... while hiding that damp floor with buckled subfloor due to the water leak behind the fridge hose hidden behind a sheet of new drywalls... that additional $10k fix or more (if mold remediation is needed etc.).
When I watch those "flipper shows" on TV, I see that they sometimes
end up getting down to a house with no sheetrock. If you have a house
down to the studs, you should take pictures as evidence that you did
such major work and that there are no surpises behind the walls.
When I was having a house built in Chandler, I had the builder let me know
the day before sheetrock was going to be installed and I made a special
flight out from CA to take pictures of every wall and ceiling ( wires, pipes,
studs, holes, etc. etc. etc. )
I guess if I was buying a flipped house, I would have a problem with one
that didn't require some plumbing and/or wiring on a 20+ year-old house.
Just because the flipper and inspector said that there were no mold or other issues ...
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Wow!!!
